Have you noticed how everyone is talking about Bitcoin these days? Some people are excited about the opportunities it offers, while others are worried about the risks. If you’re trying to get a handle on whether or not Bitcoin is a good investment, you’re not alone. Many investors are asking, “Is Bitcoin worth investing in?” This article will help you answer that question and develop a strategy for buying Bitcoin that aligns with your long-term Bitcoin annual returns goal.
One tool that can help you get a better idea of whether Bitcoin is a good investment right now is Bitcoin analysis from Bitcoin Magazine Pro. This research can help you understand Bitcoin’s price action, what’s driving it, and how it may perform. This information can help you develop a strategy for investing in Bitcoin that meets your unique financial objectives.
Is Bitcoin Worth Investing in, and Should You Invest in it?
More investors ask if Bitcoin is worth investing in as its value skyrockets. Bitcoin's value soared to new heights last month, extending a post-election surge as President-elect Donald Trump vowed to boost digital assets. Wealth advisers and personal finance experts say they’re hearing from more people taking a fresh look at the market, but their advice remains: Dip a toe in, don’t dive headfirst.
Bitcoin Risks and Benefits Remain Steady Despite Regulatory Uncertainty
POV on the risks and benefits of Bitcoin hasn’t changed much, if at all, said Samuel Deane, president and CEO of Deane Wealth Management, a financial advisory firm. Though the incoming administration is pro-BTC, knowing that it can change at any time in politics is essential.
The bitcoin price traded north of $100,000 late last week after clearing the six-figure threshold for the first time Wednesday, as investors bet on the next administration resetting the rules for an industry that has drawn scrutiny from regulators.
How Does Bitcoin Align With Your Financial Goals?
If you’re considering investing in Bitcoin, assess how it aligns with your financial goals. “Rather than bet on what the government may or may not do, I’d rather have my clients focus on what we know to be true, or what historical stock market data, for example, tells us is likely to be true,” said Kevin Mahoney, a certified financial planner and founder of Illumint, a millennial-focused firm. “That’s often going to be much more empowering for them and likely to succeed.
How Much Risk Can You Tolerate?
Investors need to understand that Bitcoin is highly volatile. Bitcoin’s price surged to over $100,000 this past week, its highest level ever. But just two years ago, it was trading at around $17,000. “You get these quick run-ups, but then you get some very sharp pullbacks,” Baker said. The thing you have to caution clients and other investors about is, “Hey, listen, you’ve got to be careful to do this in small doses.”
What Experts Say About Investing In Bitcoin
Federal Reserve Chairman Jerome Powell spoke skeptically of bitcoin this week, saying it’s still widely treated “as a speculative asset.” “People are not using it as a form of payment or as a store of value. It’s highly volatile,” he said. Contrary to what advocates have long argued, “it’s not a competitor for the dollar, it’s really a competitor for gold,” he said at a DealBook conference Wednesday. Deane also noted caution amid the recent excitement: “Not every investment that does well needs to be a part of your portfolio.”
Other Ways To Invest In Bitcoin
Bitcoin-based exchange-traded funds can help limit direct risk and are often a good place to start, Baker said. These options are new, but there are plenty of popular ones to choose from, such as the Grayscale Bitcoin Trust, launched last year after the company won a lawsuit against the SEC that helped open the door to bitcoin ETFs. Some of those investment products have exploded since Trump’s re-election.
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3 Reasons Bitcoin Is a Must-Buy for Long-Term Investors
As we set our sights on 2025 and beyond, you are probably wondering if adding this digital asset to your portfolio is smart, mainly as it trades 12% off its peak from mid-December. You think it's worthwhile to remain bullish.
Here are three reasons Bitcoin is a must-buy for long-term investors:
1. Bitcoin’s Legitimacy: Why It Matters for Long-Term Investors
Bitcoin has become a legitimate financial asset. This is the first factor that should compel investors to buy it. As of this writing, its market cap is $1.9 trillion. This is a far cry from its start in 2009, when it was viewed as a silly form of internet money that only caught the attention of cypherpunks interested in prioritizing privacy and challenging financial institutions. Its current value rivals some of the world's most dominant tech enterprises.
In January 2024, the Securities and Exchange Commission approved spot Bitcoin exchange-traded funds for the first time. This created:
- Convenient
- Liquid
- Regulatory-compliant method
For larger pools of capital to start buying. And it essentially gave Bitcoin recognition from policymakers in Washington and asset managers on Wall Street. The digital token has gotten to a point where it can no longer be ignored. It has bounced back from significant drawdowns only to become stronger than before. And it appears it isn't going anywhere.
2. Bitcoin's Digital Nature: The New Gold
Another reason Bitcoin makes sense as a portfolio addition for long-term investors is because it's digital. At a high level, it is simply a massive decentralized database and communications protocol. Being digital means that it transcends borders it's:
- Portable
- Divisible
- Translatable
Particularly when compared to physical gold. In the past two decades, the world has become increasingly digital. The rise of the internet, smartphones, and various applications is a trend too hard to ignore that has shaped our economy.
As we look to the future, it's almost impossible to believe that the world won't continue on this path, becoming even more digital, tech-enabled, and data-driven. This is especially true if you think artificial intelligence will play a more significant part in our lives. “The internet will have a native currency; it's just a matter of time,” Block CEO Jack Dorsey wrote in his company's first-quarter 2024 shareholder letter. “Artificial Intelligence systems and agents will have to transact, and the most efficient way to do so will be a common protocol for money movement.” Against this backdrop, Bitcoin, as a fully decentralized and digital method of transferring value to others, should continue rising in value.
3. Bitcoin's Scarcity: What This Means for Its Future Value
The final and perhaps more important reason long-term investors should buy Bitcoin is its scarcity. Thanks to the blockchain network's halving schedule and set inflation rate, there will only ever be 21 million coins in circulation. This contrasts significantly with the current monetary system, in which massive debt burdens, excessive money printing, and ongoing inflation have become normalized.
As citizens worldwide see their countries' fiat currencies constantly being debased, realizing that they would want to own something scarce like Bitcoin is unsurprising. A single entity doesn't control this asset. Bitcoin has had a tremendous run in the past 15 or so years. While future returns certainly won't resemble historical gains, the returns can still be game-changing. Long-term investors should still consider buying it.
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